The dust is still settling on Tuesday’s $450 million ballot race for sports betting in California. Prop 26 and Prop 27 both lost in landslides. And tribes behind the Prop 26 in-person sports betting measure are generally OK with it.
Tribes see their loss as a win.
“Tribes made clear that defeating Prop 27 was always the number-one priority, even with the tribal-backed Prop 26 on the ballot,” the Yes on 26 campaign said in a press release on Tuesday. “Our campaign spent no money on traditional advertising in support of Prop 26.”
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Early results show Prop 26 failed by a vote of 70% percent to 30%. That’s an emphatic loss, but still a better showing than the 83% to 17% crushing defeat of Prop 27 – a rival sportsbook-led initiative that would have legalized online sports betting.
That said, there’s no telling if tribes plan to bring another sportsbook initiative to the polls any time soon.
If they don’t, it might be a long time before California has any real shot at legal sports betting in the state. Because, as they clearly showed in the 2022 election, California tribes have all the leverage in their state.
Agua Caliente Tribal Chairman Reid Milanovich told California Casinos his tribe is “very adamant” about making plans regarding sports betting moving forward, but it’s too early to know what those plans are.
California Casinos also talked with Kathy Fairbanks, the Yes on 26 and No on 27 spokesperson, to get a sense of potential next steps from tribes in this California sports betting saga.
Initiative From the California State Legislature
California lawmakers have the authority to put sports betting on the general election ballot by legislatively referring a proposed constitutional amendment to voters for approval. They last tried it in 2019, when California Assemblyman Adam Gray of Merced and Sen. Bill Dodd of Napa filed companion bills to put statewide mobile sports betting on the ballot in 2020.
By mid-2020, Dodd had pulled the proposed amendment amid pressure from tribes. Soon both bills were dead.
Tribes, meanwhile, were collecting petition signatures to put what would become the Prop 26 in-person sports betting initiative on the ballot that year. After taking a detour during the pandemic, Prop 26 made it to the polls this week.
It didn’t get enough votes to pass. But don’t expect state lawmakers to take up the slack in future years.
Fairbanks said she believes a successful push for sports betting in any form will need “to have the support of tribes, and unanimous support of tribes.” She also cast doubt on a tribes supporting a ballot measure created by the legislature.
“The lopsided defeat of Prop 27 shows that California voters very strongly support tribes,” she said. “They look to tribes to provide guidance and leadership on anything gaming. And the fact that tribes opposed Proposition 27 is key to why it failed.
“A legislative solution is going to be difficult because tribes are located all over the state — so there won’t be unanimity among legislators if there’s not unanimity among tribes.”
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Initiative From a Tribal Consensus
Tribal nations in California are expected to spend the coming months looking at the 2022 election and considering what the next step – if any – should be toward legalizing the (multi-billion-dollar) California sports betting market.
The Pechanga Band of Indians is one tribe out of dozens that backed the Yes on 26/No on 27 campaign this year. Pechanga Band of Indians Tribal Chairman Mark Macarro said in a press release sent out by the campaign Tuesday that discussion will be held collectively “as tribes.”
“As tribes, we will analyze these results, and collectively have discussions about what the future of sports wagering might look like in California,” Macarro said.
Another tribal initiative is always possible. A separate group of tribes — the San Manuel Band of Mission Indians, Wilton Rancheria, and Rincon Band of Luiseño Indians — attempted this year to legalize in-person and online sports betting by statewide ballot this fall. That initiative didn’t get enough signatures to make the Nov. 8 ballot. It’s possible those tribes will regroup and push for a similar initiative for the 2024 general election, but that’s unclear.
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Fairbanks said a broad tribal consensus on sports betting is more likely to be successful.
“The tribes all need to be on the same page,” she said, especially when it comes to online sports betting. “At least right now, anything with online in it is likely to be problematic unless there is some sort of unanimity among tribes.
“And there definitely is not.”
Of course, what happens among tribes or inside the California state legislature might not matter as much if big-name sportsbooks like FanDuel and DraftKings decide to give online sports betting legalization another go in 2024. Public sentiment about who should lead the charge for legal sports betting could change, after all.
DraftKings CEO Jason Robins last month dropped hints of another run for online sports betting legalization again in two years, pending the 2022 defeat of Prop 27.
“More than likely this will pass in 2024,” Robins was quoted as saying by Bloomberg in its Oct. 11 coverage of the 2022 G2E Conference held in Las Vegas last month.
That kind of optimism was also shared by investment banker Joel Simkins of Houlihan Lokey in an interview with Yahoo Finance this week. The California-based global investment bank serves the gaming industry under its digital media service sector.
“California is just too big of a market to leave behind,” Simkins told Yahoo Finance on Nov. 6. “It’s obviously very critical for the future of the entire industry, especially on the commercial side to make the economic model work.
“If we get the California domino to fall, then Texas happens and Georgia, and then now we’ve got some scale to make it work.”